Wednesday, December 20, 2006

New Report Addresses Effects of US Subprime Lending

The Center for Responsible Lending reports that subprime lending will lead to 2.2 million US mortgage foreclosures in the near future. The newly released 58 page report can be found at the Center's website, which has more information on predatory lending practices.

Illinois used to effectively cap interest rates with usury laws, where charging interest above a certain percentage rate was illegal. The free marketeers, or loan sharks--I'm not sure of the truth--convinced the legislature to do away with the concept of usury this in the interest of extending credit to a larger pool of borrowers.

I've heard some bad stories about lousy loan products sold to people who should have known better, including some in Wilmette, but a slick salesmen can do real damage to an unsophisticated consumer .

Should borrowers be protected from their own enthusiasm? It's a tough call. If you have any insight, please leave a comment.


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